As clock ticks on Keystone XL, Canada OKs oil-sands expansion

Reuters reports time is running out for Canada to offer a climate change concession that could help it seal a deal on the proposed Keystone XL oil pipeline with the U.S.

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The Canadian government has failed to produce an agreement with its energy sector after two years of negotiating on ways to curb carbon pollution.

But if Canada were able to make a significant effort to curb greenhouse gas pollution, President Obama — who has made climate change a top second-term agenda — would be more willing to sign off on the pipeline.

"If Canada were to volunteer new greenhouse gas restrictions, that would certainly help," David Goldwyn, a former State Department official and energy consultant, told an industry conference in late October.

The clock is winding down, Reuters reports as the State Department nears completion on a report that will weigh the climate footprint of Keystone XL.

While an effort to curb emissions would help Canada's case, according to experts, The Wall Street Journalreports the Canadian government is going in another direction.

Canada's government approved the expansion of an oil-sands mine late last week with Royal Dutch Shell.

It is the latest in a string of efforts to ramp up oil-sands production, according to the WSJ.

The deal expands a part of an open-pit surface mine, adding on 100,000 more barrels of oil a day for production from the site.

Shell has not signed off on the deal yet but is reviewing the Canadian government's terms.

The decision came after a long environmental impact assessment by regulators and a second approval from Alberta, where the oil sands are located.